I'm a partner at Atlas Venture, a biotech-focused early stage venture capital firm, where I focus on helping start and fund emerging companies. You can follow me on Twitter @LifeSciVC and my blog at www.LifeSciVC.com. Email me at bruce@atlasventure.com.

Culture as a Culprit of the Pharma R&D Crisis

Everyone knows about the Pharma industry’s R&D productivity woes, but few seem to have solutions that work.

Part of treating the problem requires an accurate diagnosis, and this winter’s work in Nature Reviews Drug Discovery by Scannell et al from Sanford Bernstein (a must read) does a good job of explaining a number of possible drivers: the ‘better than the Beatles’ problem; the ‘cautious regulator’ problem; the ‘throw money at it’ tendency; and the ‘basic research–brute force’ bias. Others covered the piece with additional superb commentary here, and here.

I’m sure all these contribute to some degree, though I must admit I’m a bit skeptical that the “industrialization” of R&D are real culprits (i.e., blaming high throughput screening, target-driven reductionism, and other technologic approaches). Drug discovery is an information-rich world today in large part due to the impressive advances in robotics, screening, -omics technologies, and the like. More information will help us if we learn to integrate it properly. And phenotypic screening isn’t dead today, lots of companies still do it; regardless, it is certainly not a cure-all for what ails the industry. Applied in a thoughtful way, I have trouble believing that all these “industrialized” approaches won’t add value in the long run.

However, Eroom’s law, as the authors call the productivity decline, is both impressive and scary and reversing it will be important to the industry’s survival.

I do think there are reasons to be optimistic. In the startup world, I witness incredible examples of research productivity in a number of our innovative startups, as well as across the early stage ecosystem. I’ve seen fully characterized Development Candidates come from creative drug discovery efforts for 5-10x less that what it costs in Big Pharma. We’ve seen Fast-to-PoC approaches for novel targets on a fraction of the cost and time larger organizations would budget for; while not ubiquitous, there are plenty of examples. So despite biotech’s historic legacy of unproven productivity advantages vs Pharma, I’m optimistic that the recent crop of startup companies over the past five years are going to change the picture through more capital efficient, distributed R&D models. Many others share this perception that biotech is doing something right.

What could be driving this productivity advantage? Is it that the people are smarter? As a generality, I don’t think so. The same academic labs generate PhDs and post-doc’s that are employed by Big Pharma and small biotech alike. I’d argue that in most Big Pharma companies the Principal Scientists and Project Leaders are as good if not better than similar peers in small companies. The big companies definitely offer better pay packages and far more lab resources to support their research aims. So if it’s not the people, what is it?

Fundamentally, I think the bulk of the last decade’s productivity decline is attributable to a culture problem. The Big Pharma culture has been homogenized, purified, sterilized, whipped, stirred, filtered, etc and lost its ability to ferment the good stuff required to innovate. This isn’t covered in most reviews of the productivity challenge facing our industry, because its nearly impossible to quantify, but it’s well known and a huge issue.

Here are three of the hallmark traits of the culture crisis facing Pharma from my vantage point:

Tyranny of the Committee. Layers and layers of managers exist between the lead scientist and the head of R&D, and these layers govern by committee. We see this all the time on the BD side: the scouting committee oks the initial discussion, the science committee does some diligence, the senior committee authorizes negotiation and diligence, the diligence team sends dozens in for corporate endoscopy, the negotiation committee etc… But it goes beyond BD. Getting approvals for key project decisions require several rounds of approval. Taskforces are formed to evaluate the effectiveness of taskforces. Timelines are set by when they can get on specific committee agendas. It’s an endless fight to justify and rejustify decisions. And the amount of time (and money) wasted up and down the R&D organization by this tyranny is unquantifiably large. Where’s the empowered individual in all this?

Stagnation through risk avoidance. In big companies with large teams and big budgets, no one wants to rock the boat by doing killer experiments too quickly, especially when big discovery efforts are put against them; the fear of the “false negative” project termination is huge. But lets face it, most lead candidates are false positives (through approval) so accepting more “false negative” risk early on is probably fine. There’s also a tendency to do more work simply because they can: with big budgets, project teams in Pharma will often do a 6-10 pharmacology models to “prove” a project’s worth vs the 1-2 models that give you 90% confidence to move into Development. This isn’t just about experiments; it’s about decision-making. A cover-your-a** mentality around risk avoidance coupled with committee-driven communal decision-making has led to a very bad outcome. Where are all the risk-takers in Pharma drug discovery today? Does anyone really put their neck on the line anymore? All great drugs were saved from termination by neck-exposed risk-takers. Without enough risk-takers, progress and innovation have stagnated inside the walls of Pharma.

Organizational entropy’s negative impact. For most of Big Pharma, at least a few mega-mergers and their integrations have happened in the past decade. And for all of Big Pharma, there’s been the semi-annual reorganization around the latest fad in corporate design: matrix management, proliferating centers of excellence, end-to-end therapeutic area groups vs functional lines, disease area strategies rather than site strategies, etc… These cause constant organizational upheaval with levels of distraction that can’t be measured. Resumes fly through cyberspace as soon as a deal is announced. Organizations are frozen as these changes happen, fear of the unknown paralyzes entire project teams, and closures/layoffs happen without much regard to upgrading the talent and weeding out the deadwood. Drug R&D takes typically 10-15 years from start to approval; how can it stay on track with a cadence of change this fast? As I noted last summer, most new drugs approved today were discovered in the 1990s. Do you think those approvals would have happened faster if there weren’t so many mega-mergers and reorganizations in the meantime?

These are just a few of the cultural traits that destroy value and impair productivity. I’m sure there are many others. The solution is simple to say and hard to do: enable the full empowerment of drug hunters and their groups to do what they do without entropy and hold them accountable. Two things are probably required for this, at minimum:

First, swallow the red pill (the painful reality one) and get layers of Matrixed management out of the way. Don’t create centers and other corporate speak.=, and god forbid don’t establish a new committee to do it. Create autonomous teams that don’t report into the organization, but instead report to the top. Co-locate them on or off of the legacy campus, but in touch with the local biotech ecosystem. Ask them to tackle important research goals geared around an RFP-like process. If you want, create a Board of Directors for them. Maybe even bring in outsiders (like greybearded veteran drug hunters) to help with governance.

Second, give these groups a five-year budget and then largely ignore them. Allow for governance at the project team level without suffocating committees. Tell Wall Street that you’re going to spend $X Billion over the next 5 years in R&D, lock it in and don’t keep changing the number, changing the headcount, changing the sites, changing the management. Reduce the entropy so they can focus on drug discovery. And if they don’t deliver valuable assets, revisit, learn, and consider moving on. But do it over proper research timelines that allow programs to gestate.

These may not be the right answers, but I think it would be a great experiment to try. And better than lots of the tinkering going on today.

It pains me to see the toll the unhealthy culture of Big Pharma R&D is having on innovation and our ecosystem. There are a ton of great scientists inside of the walls of the big R&D organizations just waiting to be unleashed. And if Pharma won’t unleash them, we’ll end up hiring them into our biotechs sooner rather than later.

Post Your Comment

Post Your Reply

Forbes writers have the ability to call out member comments they find particularly interesting. Called-out comments are highlighted across the Forbes network. You'll be notified if your comment is called out.

Comments

One aspect of the “industrialisation” of R&D that I believe is a significant contributor to low productivity is the sheer number of targets worked on by big pharma. This was driven by the technology that enabled it but also because management believed that doubling resources would double productivity. It may have done, but 5x or more (as happened) was doomed to failure. There are not enough good quality targets available to keep large research groups (like Pfizer, Merck and the rest) gainfully employed. As a result, resources were spent on producing drug candidates for second or third rate targets where the risk was too high. Perhaps more of a strategy than a just culture!

All relevant points to which I would add a question: how many R&D heads have actually discovered a drug or lead a small team that did? Very few. Most are (were) imported from academia, and have no hands-on experience of either drug discovery or development. Not insurmountable, but doesn’t help either. They gravitate to where they feel comfortable, eg administration, (re)organiztions, new committees, visions, etc. Anything but actually working in the lab identify/validating targets and/or designing/synthesizing/expressing molecules that can do the business. In Rx R&D getting your hands dirty helps tremendously.

Overall I agree that culture is a huge factor inhibiting pharma breaking through to a new paradigm for drug discovery. Alasdair’s point about too many targets is just another way of saying the needle has swung too far in favor of target identity as means to prioritize, rather than phenotype. It is also interesting that many/most of the block busters going off patent were characterized initially more by phenotype than by mechanism/target. Slavish focus on target doesn’t get you a better drug, just one you can market differentiate from the competition. “Oh, Dr., our drug is much more potent on kinase X than BPX’s. And theirs hits GPCR-Y, known to cause an increase in in-grown toe-nails!” I have watched the characterization of a drug evolve during its development after after its launch as new assays come on line. A drug initially described as ‘selective’ is later found to hit multiple other targets as the assays for those other targets become perfected. I am not suggesting that knowledge of the biochemical pathway isn’t valuable, just that without a clear sense of how your compound affects disease ‘phenotype,’ are you sure you have a potential drug? And just because all you have is a ‘phenotype’ with unclear mechanism, does that necessarily mean you don’t have a drug? I have seen too many promising leads that fit the latter description discarded too soon. I agree that there is a culture to avoid too quick a kill, but one should also be cautious not to move too far to an eagerness to kill at the first sign of trouble. Many of those risk-takers to which you refer, were taking a risk to argue that some negative result should not be used to kill a project (i.e. arguing against too quick a kill). I also agree that leadership in R&D is more about “organizational effectiveness” (i.e. committee management) rather than knowing what the hot scientific leads are.

Thank you for calling out last month’s opinion piece in Nature Reviews drug discovery. I am afraid that any advantage that a biotech model may have is not sufficient to address the heart of the problem. Eroom’s Law, has been constant for decades. I say it is a characteristic of product development in the life sciences due to the complexity of the systems under study. I also say that competition itself contributes to the problem. To compound the issue our society has moved dollars away from basic science steadily since 1980.

The human system is immensely complex. Many (if not most or all) clinical trial failures reveal a lack of fundamental system understanding at the outset. It is interesting to look at Eroom’s law in the context of the radical change in the source and nature of R&D investment in this nation over the past three decades. In 1980, industry (all combined, source = NSF) and the government invested about equal amounts in R&D. Now, Industry invests about 2/3 of every dollar spent on R&D and the government 1/3. NSF data also show that companies invest about 80% in D and 20% in R (and much of that is applied science). The government R to D ratio is flipped; 80% going to R and 20% to D. It is interesting to consider that Moore’s Law is a positive slope—that changing ratio has not hurt product development in the physical sciences. [The source and nature of R&D investment is the same in the pharmaceuticals/medicines sector as well (PhRMA).] The outcome in health care has been Eroom’s law. I don’t think just having smaller companies can answer the fundamental problem. GSK has moved to an approach similar to biotech with several dozen Discovery Performance Units and reviews every three years. I hope that it helps but it does not address the fundament change in the amount of resources we devote as a nation to basic understanding of nature. Indeed, we should look squarely at this issue and say that we have been spending too much on D relative to R in bio-pharma. That’s what the data show. Biotech is by and large doing D, not R. Shifting around dollars within the D investment does not address the need for deeper fundamental understanding. The issues creating this massive shift away from basic science are people issues and relate to the nature of competition. It is of course rational for individual players to invest in D for their little piece of IP. Systemically, it has not been working in health care.

Regarding the influence of the source of the investment, competition creates problems in health research. We are experimenting on humans. Companies that discover that their clinical mechanism is flawed and harms patients may not share that knowledge with other companies. That means that patients may be hurt unknowingly (and unnecessarily) by other companies pursuing the same mechanism.

I see so much FDA bashing. That’s not leadership. There was a recent survey of VC professionals, sixty percent of whom said the FDA was the main reason for lack of drug approvals. In a similar survey of Biotech CEOs, 80% blamed the FDA. I have a couple of comments about those numbers. First, they are self-reported. I applaud the 40% who did not blame the FDA. Choosing the answer that makes the FDA the main reason for the failures means they did not have to choose the fact that they didn’t know what they didn’t know at the outset. The difference between the response between VCs and Biotech CEOs is also interesting. VCs have a portfolio view. Biotech CEOs are the chief sales person for a narrow piece of IP. “Kill it early” has become a mantra in this field but not for Biotech CEOs with a single project. I don’t think a Biotech CEO could say “kill it early” about a single piece of IP given the fiduciary nature of their role.

It’s time to look at this irrefutable data squarely and come up with better structures for our markets. We need to get back to investment in fundamental understanding of the human system and quit taking shots in the dark on expensive trials. Everybody wants a home run. I don’t blame them. They’re rational and after all. it works in other industries but not in health care.

In light of my comments calling for more basic science, there is another good article from the same journal as Scannell et al. Peter Tollman and colleagues at BCG showed that some companies are better at R&D than others (Nature Reviews Drug Discovery 10, 653-654 (Sept. 2011)). Guess what was predictive of R&D efficiency at companies, basic science and the ability of employees to pursue their own creativity on company time. Actually, they did not say that but they did say it was leadership, communication across the R&D value chain (internal and external), and employee engagement. The most efficient companies on their two-by-two (of drugs launched / $ billion) were those with basic science. How do you engage scientist employees? Let them pursue their curiosity. Can little biotech’s do that?

Thanks for shining yet another light on this important challenge. We’ve been working the problem @ www.kyield.com for many years. The good news is that the generic solution, which can be tailored to each organization, business unit, and individual, is now possible in near real-time. Extending advanced analytics across the largest enterprise in such a way that incentivizes and protects original work while introducing advanced predictive capabilities has been a significant technical challenge, (especially scaling 24×7) –see Forrester Report Future of BI – 1/2012.

We are currently conducting an extensive search for well matched collaborative pilot partners, in various stages of discussions with several large organizations.

The bad news is that cultures that are not terribly innovative and/or experience repeated crises are quite often not terribly receptive to quaint notions like automated accountability, meritocracy, empowering individuals/teams, competitive levels of efficiency, and the type of intellectual currency that tears down barriers to innovation and expedited discovery, rather than obstruct.

We do have interest from a couple of companies that can be considered big pharma, however, so there may be reason for more encouragement than is being released to the public. Let’s hope so– it’s a challenge that impacts the super majority of humans at some point in their lives.

Sorry Mark, But this kind of analytic analysis if often part of the problem, not the solution. Yur lean thinking 6 sigma analytic brethren have been tried all over large pharma, and while for certain aspects of routine research it can be applied, there at least as many where the research complexities and unknowns render the approach worse than useless. These problems tend to be project specific and by extension rely project specific innovation to solve them. One cannot create an analytic solution to a problem for which the modeling data does not exist. If you want a great example of this check out:

Great analysis and great suggestions. I particularly resonate with your comment about reducing management infrastructure and meetings. I sometimes wonder when my clients have time to get their work done.

My recent blog column, “Medical Innovation: The Dream of More Cures and More Industry Success” looks at the same problems from the perspective of a policy analyst and FDA regulatory consultant. My analysis can be found at: http://www.fdamatters.com/?p=1821. I address a number of other FDA issues weekly at www.fdamatters.com

My main concern is that industry blames FDA, when it really needs to re-examine its own approach. FDA, by itself and with Congress, is trying to evolve into a more effective regulator. This is hopeful, but not the primary problem that needs to be resolved.

Coming from different perspective, we seem to reach the same conclusion: “The key to medical innovation is better and smarter drug and device development. Nothing will help patients or companies if medical innovators don’t innovate.”

I believe that the culture problem is really the core of Big Pharma R&D troubles, and the origin of this culture problem is rooted in the type of workforce which tends to survive uncertainty of corporate mergers, waves of outsourcing to BRICs and other regions, and off-shoring. To prove or disprove this hypothesis it would be necessary to get access to classified industry data. The information to search for would be as follows:

- Employment status: main interest is type of contract and duration of employment within the corporation (total vs. permanent; as some rights during redundancies relate to type of contract) - Legal status of employees (third country nationals; dependence on corporate sponsorship); - Vulnerability defined as family backup and socio-economic background and overall dependence on the corporation, including e.g. high mortgage in a remote area where there is no other potential employer; - Documented schooling and training including internationally adopted ethical standards in medicine - Real and declared working hours - Cocaine and other stimulant abuse within the industry (this is widely tolerated white collar drug with large impact on short-term performance and perception of risk); - Personal characteristics of team leaders and team members in R&D and pharmacovigilance (many corporations conduct Briggs Meyer personality tests or their equivalents)

Research questions:

What are the relationships between characteristics outlined above?

How the data collected above (contract type, legal status, personality characteristics, marital status and reproductive activity, etc) relate to important corporate timelines (date of takeover, date of signing an important contract which results in large-scale outsourcing or off-shoring etc);

Survivors of corporate mergers (Group A) tend to have different demographic and behavioral characteristics from those who left for whatever reason (Group B), no matter if they were made redundant / left voluntarily / were bullied out but remained silent on the problem / were bullied out and spoke up / actively fought back legally or even blew a whistle on any type of corporate malpractice.

What type of employees does Big Pharma prefer? What cohort are we looking at – are they people who are in no position to say “No” if confronted with e.g. “ethical dilemma”?

Questions: 1) What are the quantifiable differences in personal, behavioral, and demographic characteristics between Group A and B?

2) Is there an increased death rate in group B compared to group A?

3) How reproductively active is Group A compared to Group B? (this is relevant as it related to type of contract and long-term expectations)

If there is indeed increased death rate in those who left compared to those who stayed after a critical incident (corporate merge), we might be in fact dealing with “non-benign Non-State Actor” as defined in book Sensemaking by David T Moore (NDIC, 2011). http://ni-u.edu/ni_press/pdf/Sensemaking.pdf

The problem of productivity in big pharma has the same root causes that we see in all other sectors of industry which is weak leadership with a lack of pride in both their corporation and product success. Productivity has to do with quality and quality is a direct result of a lack of pride in craftsmanship. The industry has lost it’s pride in craftsmanship due to unrealistic investor returns and short term profit pressures put on corporate executives. Success has been defined as monetary success and not marketing a quality product. These pressures are then put on research to meet unrealistic goals in unrealistic timelines and to slash research budgets to make the company’s bottom line look better in the short term.

The result of this is outsourcing of jobs to inferior scientists in China and India who have neither an interest in the success of your company nor a pride in the quality of the work, only a desire to make money. Secondly, it effectively destroys the moral of the researcher taking away personal pride in craftsmanship and removing any sense of working towards a team goal. Team goal (corporate pride) is lost when they see their leadership receive huge executive compensation for slashing jobs and outsourcing the people actually discovering the drugs.

Corporate executives who know little or quite frankly nothing about drug discovery love metrics and usually set arbitrary goals of “x” number of NME’s per year as a sign of productivity. When craftsmanship is lost, all that remains is the creation of the “illusion” of success by middle managers in R&D who become hold on to their jobs by becoming metrics oriented instead of craftsmanship oriented. They become unwilling to become risk takers, a key trait of entrepreneurs and those who work at the more productive small biotech companies. It becomes a shell game guessing what upper management deems as success and delivering that to them instead of a real quality product.

Another result of the NME metric is what I call corporate ADD (attention deficit disorder). Most companies refuse to stay the course on projects because research is forced by upper management to meet unrealistic goals set by executives to appease investors. The result of this is either the cancellation of projects prematurely or pushing drugs into clinical trials prematurely to meet the required NME count set as a metric of productivity.

What I have said above is certainly not all inclusive but it gives a sense of why big pharma is unproductive. The real issue is whether or not there will ever emerge true leadership that will break this cycle and right the ship. That remains to be seen.

I think this observation can be explained by statistics alone. Among the hundreds of small biotech startups, there will be always much greater variance of performance compared to a few pharma giants. It is a product of small size and nothing more – at the smaller scale, the probability of random performance glitch is much greater. Large organizations average the breakthroughs and pitfalls to the typical industry values. It is just the law of large numbers.

A few amazingly successful small firms prove statistics works and nothing more. No other explanation is required.

Excellent article, Bruce. You are spot on in my opinion. Culture is so important which is probably why so much true innovation is coming from smaller biotechs while big pharma is still churning out the me-too’s. Your last point really drives home the message that mega-mergers may not be what the industry needs as it may in fact be stifling innovation through additional bulk and delay.

Bruce, having worked directly with R&D and regulatory leaders at big pharma while at PhRMA (the trade association) for a number of years, I believe you nailed the problem squarely on the head! I think business leaders have taken notice as they seem to prefer to acquire more and more drug candidates rather than attempting to develop them in house. I say, by-pass the BCG, McKinsey, etc. recommendations for “improving organizations,” and simply get to work. This is R&D in its purest form afterall.

Great article Bruce. I agree wholeheartedly with just about all your comments. I do have one question/comment on the subject of the chemists in big Pharma compared with Biotechs – the quality of the chemists is pretty much the same in both areas as you say but do you think that the chemists that join big Pharma tend to be more averse to risk taking than those that join Biotechs? This would partly explain the different performance of the two sectors, although I do think the constant mergers/reorganisations etc in big pharma have a significant negative affect on drug discovery. One final comment is that Biotechs are often more likely to work on less “sexy” targets and indications and aren’t as obsessed with finding blockbusters.

Although the article alluded to it I don’t think it really hit on an ancillary problem caused by the corporate mindset; Big Pharma R&D management is so focused on the high priority projects they discourage bench chemists and similar personnel from “puttering “in the lab. How many discoveries have come from the “puttering”? I think history can answer that one. Management wants their employees focused acutely on the problems at hand and not “wandering” off doing some other research, even on their own time. Many people get into these disciples because it is exciting, interesting, and fun. By discouraging the fun, often making it less interesting, and at times causing gastro-intestinal distress, people leave the discipline. Another issue I see is the annihilation of the research infrastructure. By this I mean getting rid of (through layoff, encouraged retirement or general attrition) all the many long term lab techs and other personnel who know as much, if not more than their senior management about marching a project through the process, or know how to get things done quickly because they “know” certain people in a variety of disciplines. Today, those techs and other people have not been replaced at all, or have been replaced with contract type lab techs that will be there for no more than 12-24 months and don’t know the ropes, and don’t care to learn the ropes of how to get things done. They just do the job they’ve been given.

An excellent article; the issues you point out and the solutions you suggest are all good ones. The comments called-out are also (mostly) on the money too.

But everything here has been obvious to every scientist in the industry for most of my nearly 30-year career, and in my experience has even been discussed (once or twice) at the committee level. And yet, here we are.

So, with your list of issues in hand, what immediate course of action should the industry (that’s us) take? Talk to the staff actually doing the work – the hands at the bench. We are engaged in a massive offensive against an incredibly creative enemy – the global pharma/biotech industry against disease. Our generals need to spend time in the trenches and get the intelligence they need directly, not filtered through committees or layers of management.

An excellent article; the issues you point out and the solutions you suggest are all good ones. The comments called-out are also (mostly) on the money too.

But everything here has been obvious to every scientist in the industry for most of my nearly 30-year career, and in my experience has even been discussed (once or twice) at the committee level. And yet, here we are.

So, with your list of issues in hand, what immediate course of action should the industry (that’s us) take? Talk to the staff actually doing the work – the hands at the bench. We are engaged in a massive offensive against an incredibly creative enemy – the global pharma/biotech industry against disease. Our generals need to spend time in the trenches and get the intelligence they need directly, not filtered through committees or layers of management. Then, maybe, our industry can take practical, useful action.

We must avoid saying “With new information, we will make new management plans.” To continue the military metaphor, Field Marshall von Moltke had the last word on plans (pre-1914); “No plan survives contact with the enemy”.

Outstanding article Bruce. Culture is really the elephant in the room that all the analysis, hand wringing and attempts to diagnose what’s really wrong with our beloved industry always seem to be unwilling to address head on.

But what we’re really talking about needing to happen for things to really improve is a fundamental change in the DNA of these companies. Hiring the right people means hiring true brilliance, mavericks, and people who don’t always follow the rules, and tolerating the risk that comes with all that.

Is Big Pharma ever really going to be able to embrace that kind of culture?

To me, that is the essential question.

You can have committee meetings, Six Sigma programs, metrics, analyses, whatever, but if your culture is risk averse and dominated by people whose mission in life is exist to preserve their jobs and the status quo, nothing will ever change.

Outstanding article Bruce. Culture is really the elephant in the room that all the analysis, hand wringing and attempts to diagnose what’s really wrong with our beloved industry always seem to be unwilling to address head on.

But what we’re really talking about needing to happen for things to really improve is a fundamental change in the DNA of these companies. Hiring the right people means hiring true brilliance, mavericks, and people who don’t always follow the rules, and tolerating the risk that comes with all that.

Is Big Pharma ever really going to be able to embrace that kind of culture?

To me, that is the essential question.

You can have committee meetings, Six Sigma programs, metrics, analyses, whatever, but if your culture is risk averse and dominated by people whose mission in life is exist to preserve their jobs and the status quo, nothing will ever change.

Discussions about the failure of modern drug development – and it has failed . . . past tense – always bring to mind the wonderful story about the blind men and the elephant. The man touching the side declares an elephant to be a wall, the man touching the tusk declares the elephant to be a spear, trunk/snake, tail/rope etc. Your observations coupled to the commentary touches many body parts.

The elephant story is pertinent in another regard: None of the individual observations are verified by independent observation. Had the men decided to revolve around the pachyderm, each reporting his findings in turn, they’d have quickly realized the complexity of the beast. The same checks and balances are missing from modern drug development. Indeed, little or no information is provided by parties without a vested interest in financial outcomes.

For example, as has been noted in other comments, no manager of a small biotech/small pharma is likely to present their would-be drug in any but the best light. The same is true for large pharma in which report cards assume outcomes that had best be met if paychecks are to continue. This willful form of ignorance infests funding agencies and universities alike, the latter the owner of increasing numbers of bio-related patents. Such a system (collection of systems) cannot innovate and does not self-correct.

Early to middle stage biotech/pharma investors seem to have accommodated this form of willful ignorance. After all, the goal of the vast majority of such investments is the sale of license of patents further up the food chain (as personified in the “Saga of Molly” at http://newlibertyproteomics.com/molecule-to-drug.html ). In support, published reports by major pharma indicate that up to 90% of the work reported by prior candidate owners cannot be repeated!

The solution is simply stated if not implemented: would-be drugs must be subject to testing by disinterested, third parties. This approach, of course, is a fundamental tenet of scientific method, a tenet that acknowledges bias and interest in a single stroke.

Obviously few if any owners of existing would-be drugs are likely to embrace such a solution. Disinterested testing must, then, be imposed upon the system as a whole, the most likely source being early and middle stage investors.

Discussions about the failure of modern drug development – and it has failed . . . past tense – always bring to mind the wonderful story about the blind men and the elephant. The man touching the side declares an elephant to be a wall, the man touching the tusk declares the elephant to be a spear, trunk/snake, tail/rope etc. Your observations coupled to the commentary touches many body parts.

The elephant story is pertinent in another regard: None of the individual observations are verified by independent observation. Had the men decided to revolve around the pachyderm, each reporting his findings in turn, they’d have quickly realized the complexity of the beast. The same checks and balances are missing from modern drug development. Indeed, little or no information is provided by parties without a vested interest in financial outcomes.

For example, as has been noted in other comments, no manager of a small biotech/small pharma is likely to present their would-be drug in any but the best light. The same is true for large pharma in which report cards assume outcomes that had best be met if paychecks are to continue. This willful form of ignorance infests funding agencies and universities alike, the latter the owner of increasing numbers of bio-related patents. Such a system (collection of systems) cannot innovate and does not self-correct.

Early to middle stage biotech/pharma investors seem to have accommodated this form of willful ignorance. After all, the goal of the vast majority of such investments is the sale or license of patents further up the food chain (as personified in the “Saga of Molly” at http://newlibertyproteomics.com/molecule-to-drug.html ). In support, published reports by major pharma indicate that up to 90% of the work reported by prior candidate owners cannot be repeated!

The solution is simply stated if not implemented: would-be drugs must be subject to testing by disinterested, third parties. This approach, of course, is a fundamental tenet of scientific method, a tenet that acknowledges bias and interest in a single stroke.

Obviously few if any owners of existing would-be drugs are likely to embrace such a solution. Disinterested testing must, then, be imposed upon the system as a whole, the most likely source being early and middle stage investors.

Thank you Bruce for your great insights on this topic. To me, it is quite paradoxical how big pharma aspires to create an innovative environment, but at the same time most big pharma organizations have cultures that are repressing just that. Is it a mindset problem, human capital problem or just the nature of big pharma that relentlessly needs to de-risk its project portfolio? Maybe you have the right people, but the wrong system or culture? If you put the right people in the wrong system – they will soon start to adapt to the system in order to stay afloat. Personally, I’m convinced that some of the innovation can be brought back, if you engage the best and most creative talents and allow them to work freely with little supervision. Give them resources and time – hold them accountable after a while. Continue funding of only the best performers – then I’m sure you will see results.